Lawmakers: Variable-rate electricity contracts take advantage of consumers
HARTFORD – Senate President Martin Looney gathered with other leaders and representatives of AARP on Tuesday, Feb. 24 to discuss variable-rate electricity contracts, which they say take advantage of consumers.
He’s introduced a bill that would ban electric suppliers from offering them to residential electric customers.
In Connecticut, you are given the option of shopping around for electricity and that includes picking companies with different options.
A fixed rate will keep your electric rate even from month to month throughout your contract, where a variable rate can fluctuate per month.
Looney wants to ban the variable-rate option for residential electric consumers saying the practice can be predatory.
He said such rates can particularly hurt vulnerable seniors because these plans need knowledge and vigilance.
Looney warns some companies are trying to reel customers with a low introductory rate, and then their taken advantage of by the electric supplier.
“They are counting on the customer not reacting quickly enough to change plans so that the person winds up being trapped for at least some period of time in the higher rates,” said Looney.
Connecticut’s Consumer Counsel, Elin Katz, said certain electrical suppliers claim their variable rates are tied to market conditions.
Katz’ team checked the last quarter of 2014 when market rates should be the lowest because it’s not the dead of winter or summer.
They found 15 electric suppliers offering variable rates more than 30 percent above standard offer.
Last year, lawmakers put through several industry reforms to protect the consumer, including the requirement every company show the customer’s electrical rate on their bill for the coming month, by this July.